By guest contributor Gerald Tay

There are many investors who invest in properties solely for capital gains. They are not concerned with making a rental profit, and are sometimes even happy to make a rental loss! Understanding why property prices rise and fall is very important if we want to make money.

In Singapore’s highly volatile property market, you should never count your chickens before they hatch. Inexperienced, amateur and speculative investors only know how to count chickens. Successful and smart investors count the eggs and understand why and how they hatch.

It is property prices that drive yield, not the other way round. Property prices are volatile, rents are stable. We call the rise and fall of property prices the boom-bust cycle.

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